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Sensex Ends 334 Points Lower; Auto and Banking Stocks Witness Selling
Fri, 6 Dec Closing | Monish Vora, TM Team

India share markets witnessed huge selling pressure today and ended their day deep in the red.

At the closing bell, the BSE Sensex stood lower by 334 points (down 0.8%) and the NSE Nifty stood down by 96 points (down 0.8%).

The BSE Mid Cap index ended the day down 1.3%, while the BSE Small Cap index ended the day down by 0.9%.

Stocks in the auto sector and banking sector witnessed huge selling pressure, while telecom stocks were trading in the green.

The rupee was trading at 71.27 against the US$.

Asian stock markets finished on a positive note. As of the most recent closing prices, the Hang Seng was up by 1.07% and the Shanghai Composite was up by 0.43%. The Nikkei 225 was up 0.23%.

European markets were also trading on a positive note. The FTSE 100 was up by 0.67%. The DAX was trading up by 0.16%, while the CAC 40 was up by 0.39%.

Speaking of Indian share markets and the Indian economy, with the RBI keeping interest rates unchanged yesterday, the focus of market participants has now shifted to whether the RBI's rate cut will translate into better economic activity in the near term.

Like this chart shows, RBI rate cuts have always had a big gap with bank lending rates.

Yet Another RBI Rate Cut May Not Result in Lower Lending Rates

Yet Another RBI Rate Cut May Not Result in Lower Lending Rates

Here's what Tanushree Banerjee wrote about it in a recent edition of The 5 Minute WrapUp...

  • It will be a while before lower lending rates stoke the economy.

    Therefore, hoping for an immediate revival in the economy is futile. The RBI has no magic wand to do this.

    Rather look for stocks that can outperform irrespective of the RBI policy.

    I believe the cement sector may be a good place to start.

    One of my recent recommendations from the sector is a typical Rebirth of India stock.

    And I won't be surprised if it repeats its 2002-2006 performance.

Also, since we're on the topic of RBI rate cut...note that after the RBI's decision to keep repo rate unchanged, the Bank Nifty Index fell sharply.

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In the news from the commodity space, crude oil was witnessing buying interest today. Gains were seen as OPEC agreed to increase output curbs by nearly 50% in early 2020.

The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia agreed one of the deepest output cuts this decade to support crude prices and prevent a glut but were still debating how long the curbs would last next year.

For the aforesaid cuts, OPEC has discussed supply policy in Vienna and is also meeting with Russia and other producers, a grouping known as OPEC+.

The members will consider how to balance their supply with another year of rising output from the United States in 2020. Other non-OPEC countries such as Brazil and Norway are also expected to pump more oil.

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Russian Energy Minister Alexander Novak said a panel of key energy ministers including Saudi Arabia and Russia had recommended the OPEC+ group deepens existing supply curbs of 1.2 million barrels per day by another 500,000 bpd.

The cut of 1.7 million bpd would amount to 1.7% of global crude oil supply.

He said cuts would last through the first quarter of 2020, a much shorter timeframe than suggested by some OPEC ministers, who have called for extending cuts until June or December 2020.

OPEC+ has agreed voluntary supply cuts since 2017 to counter booming output from the shale fields of the United States, which has become the world's biggest producer.

Note that Saudi Arabia needs higher oil prices to support its budget revenue and the pending initial public offering (IPO) of state-owned oil giant Saudi Aramco.

The state oil company Aramco launched its initial stock offering on Thursday, raising US$ 25.6 billion.

The sum raised by the oil giant surpasses the US$ 25 billion garnered by the Chinese online trading group Alibaba in 2014 when it entered Wall Street.

The IPO still falls short of the towering US$ 2 trillion valuations long sought by Crown Prince Mohammed bin Salman.

How the above output cuts will affect the crude oil markets and the Aramco IPO remains to be seen. Meanwhile, we will keep you updated on all the developments from this space.

In the news from the banking sector, Andhra Bank share price was in focus today. The stock of the lender witnessed selling pressure after the Reserve Bank of India (RBI) imposed a penalty of Rs 25 lakh.

Andhra Bank was fined for failing to comply with RBI's directions on know your customer (KYC) norms, anti-money laundering standards and opening of current accounts.

The bank has already taken necessary preventive measures, the state lender said in a filing to the exchanges.

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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Stock Market Updates

SBI Plunges by 5%; BSE BANKEX Index Down 1.1% (Today's Market)

Dec 6, 2019 03:34 PM

SBI share price has plunged by 5% and its current market price is Rs 338. The BSE BANKEX is down by 1.1%. The top gainers in the BSE BANKEX Index are KOTAK MAHINDRA BANK (up 1.5%) and CITY UNION BANK (up 0.3%). The top losers are SBI (down 5.1%) and BANK OF BARODA (down 5.2%).

YES BANK Plunges by 10%; BSE BANKEX Index Down 1.1% (Today's Market)

Dec 6, 2019 03:30 PM

YES BANK share price has plunged by 10% and its current market price is Rs 61. The BSE BANKEX is down by 1.1%. The top gainers in the BSE BANKEX Index are KOTAK MAHINDRA BANK (up 1.4%) and CITY UNION BANK (up 0.3%). The top losers is YES BANK (down 10.5%).

JAMNA AUTO Plunges by 5%; BSE 500 Index Down 0.8% (Today's Market)

Dec 6, 2019 03:22 PM

JAMNA AUTO share price has plunged by 5% and its current market price is Rs 43. The BSE 500 is down by 0.8%. The top gainers in the BSE 500 Index are MMTC LTD (up 11.4%) and ERIS LIFESCIENCES LIMITED (up 8.9%). The top losers are JAMNA AUTO (down 5.0%) and LIC HOUSING (down 5.2%).

GUJARAT GAS at 52 Week High; BSE 500 Index Down 0.8 % (Today's Market)

Dec 6, 2019 03:22 PM

GUJARAT GAS share price has hit a 52-week high. It is presently trading at Rs 228. BSE 500 Index is down by 0.8% at 15,533. Within the BSE 500, GUJARAT GAS (up 2.0%) and MMTC LTD (up 11.4%) are among the top gainers, while top losers are OMAXE LTD and DISH TV.

The BSE REALTY Index Down 2% ; OMAXE LTD Among Top Losers (Today's Market)

Dec 6, 2019 02:54 PM

The BSE REALTY Index Down at 2,205 (down 2.0%). Among the top losers in the BSE REALTY Index today are OMAXE LTD, PRESTIGE ESTATES and INDIABULLS REAL EST. Meanwhile, the BSE Sensex has plunged 0.9% to 40,952.

Sensex Slips 180 Points; Yes Bank & SBI Top Losers (Today's Market)

Dec 6, 2019 12:30 pm

The BSE Sensex is trading down by 133 points, while the NSE Nifty is trading down by 43 points.

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Dec 6, 2019 03:31 PM